September 27, 2018

Australia is set to reach its target of 100% renewable
energy by the early 2030’s, provided current uptake of renewable energy options
in the residential and commercial sectors remains strong.

The Australian renewables energy industry will install more
than 10 gigawatts of new solar and wind power before the end of 2019 and if
that rate is maintained, Australia would reach 50% of its renewables target in
2025.

The reduction target, set under the famed Paris Agreement into global climate change, forms part
of a commitment made by Australia in 2015 to cut carbon emissions nationwide by
up to 28% of 2005 levels by the year 2030.

It represents reductions of around 52% in emissions per
capita and around 65% in the emissions intensity of the economy between 2005
and 2030.

Homeowners and industry have embraced the renewables
challenge so well that it now seems possible the nation will reach the
equivalent of 100% renewables for its electricity supply well before then.

A report by the Energy Exchange Institute at Australian
National University, says merely keeping up the current rate of renewable
energy deployment – roughly divided between solar photovoltaics (PVs), wind farms
and rooftop solar PVs – would meet the country’s entire emissions reduction
task for the whole economy by 2025.

Net
new global generation capacity additions in 2015 and 2017.

That doesn’t take into account recent announcements at State
level to make solar a more attractive option to consumers.

Federal initiatives

In 2015, the Senate passed a Renewable Energy Target (RET)
which aims to have more than 23.5% of Australia’s electricity derived from
renewable sources by 2020.

The scheme is split into two areas – large-scale for the
establishment and expansion of renewable energy power stations with a target of
33,000 gigawatt-hours of renewable electricity generation by 2020; and
small-scale which includes financial incentives for households, small
businesses and community groups to install systems such as solar hot water
heaters, heat pumps and solar PV systems.

The RET is supported by the Australian Renewables Energy
Agency, established in 2012 to promote and fund researchers, developers and
businesses which demonstrate the feasibility and potential commercialisation of
their renewables energy technologies and projects.

According to some reports, “surging numbers” of commercial
and industrial projects are applying for accreditation under the RET.

By contrast, the Turnbull government’s National Energy
Guarantee struggled to find favour with the states and the coalition from the
moment it was proposed last year.

Under the proposal, power retailers would have been required
to meet minimum reliability and pollution standards as part of efforts to cut
Australia’s carbon emissions.

But WA and the Northern Territory – neither of which are
connected to the national electricity market – rejected the National Energy
Guarantee, and opposition snowballed from all corners until the idea was
unceremoniously dumped last month, in much the same way that Turnbull was a
short time later.

Western Australia

While WA was never supportive of Turnbull’s proposal, it has
always been well placed to take advantage of the renewables energy trend,
particularly in solar and wind.

APA Group for example, is set to deliver the second and
largest grid-connected hybrid wind and solar facility in WA, with a decision in
August to add a 17.5 megawatt solar farm to the 130 megawatt Badgingarra wind
park near Geraldton as part of a late push into large scale renewables.

Both farms are contracted to Alinta Energy, which is looking
to expand its retail business in WA and has extended its contract with APA to
2035 – beyond the closing date of the RET scheme.

Badgingarra will be the second of its kind in the state,
after the Emu Downs wind and solar parks also near Geraldton.

Meanwhile in July, WA Energy Minister Ben Wyatt called for a
scrapping of government subsidies for rooftop solar panels, claiming the cost
of the units had fallen to a more accessible price point for West Australian
households.

Panel incentives have to date been subsidised up front to homeowners
through the “small scale” section of the RET.

South Australia

Currently leading the nation in the uptake of wind energy
and rooftop solar, South Australia’s renewable sources account for more than
40% of electricity generated in the state.

British
billionaire Sanjeev Gupta is the brains behind the development of the
Cultana solar project in the state’s Upper Spencer Gulf region, to include 780,000
solar panels capable of generating 600GWh of energy generation per year –
enough to power 96,000 homes while offsetting 492,000 tonnes of carbon dioxide.

The project – slated for development in 2019 – will join a
second solar project to be built nearby under the management of Mr Gupta’s
company SIMEC ZEN Energy to become one of the country’s largest solar farms.

A separate battery farm project also managed by Mr Gupta
with $10 million assistance from the state government will have a planned
capacity of up to 140 megawatt-hours and will store wind power from a planned
farm near Adelaide.

Also on the battery bandwagon is German solar battery firm
sonnen, which plans to set up a manufacturing plant in South Australia capable
of building 10,000 batteries a year.

Up to 40,000 households will be eligible for subsidies to
install the flat batteries under the state government’s $100 million rebate
scheme.

Victoria

The garden state is forging ahead with plans to build six
renewable energy plants by 2020 – three solar and three wind – producing 928
megawatts capable of powering 645,000 homes.

The plants were awarded by Premier Daniel Andrews via a
reverse auctions scheme which saw project developers compete to be the
lowest-cost provider.

Around the same number of homes will also benefit from
half-price rooftop solar panels being offered by the government as part of
a $1.24
billion Solar Homes scheme announced in August.

Families earning less than $180,000 per year with homes
valued at less than $3 million will be eligible for the scheme, in which the
government will pay $4550 upfront to install the panels and households would
repay the remaining half over four years.

They are not the only prizes up for grabs though – with the
November election approaching, the Premier has pledged additional incentives
for householders if his party wins, helping it transition closer to its
legislated renewables target of 25% by 2020 and 40% by 2040.

Also on offer will be half-price solar batteries for
families who have already installed solar panels – with the catch that it will
only be offered to 10,000 homes – as well as a discounted solar hot water
scheme for around 60,000 homes.

Queensland

In July, Energy Minister Dr Anthony Lynham said the sunshine
state will have 2164 megawatts of renewable energy ready by mid-2019 – a level
of energy which is enough to power 800,000 homes, according to the Clean Energy
Council.

Darling Downs will be one of the more significant
contributors, as it experiences a renewables energy boom to replace the
economic distress felt in the region when the coal-seam gas industry scaled
back its operations.

At least one wind and 11 solar farms worth $6 billion have
been approved to date.

The first big project – a $200 million, 110-megawatt
photovoltaic solar farm near Dalby, owned by APA Group – will have
approximately 430,000 solar panels covering 250 hectares when it is completed
by year end.

This year, the local Toowoomba council approved a
billion-dollar project which, if it goes ahead, could become the biggest in the
world by the time construction finishes in a decade.

In July, construction started on Stage 2 bulk earthworks for
the 100 megawatt Yarranlea solar farm in neighbouring Pittsworth, by Chinese
company Risen Energy.

The farm – which will have an operating life of at least 30
years – will utilise the latest PV panel technology and eventually integrate
battery storage to allow it to supply power to the grid during peak periods.

The University of Queensland is set to become the first of
its kind in the world to offset 100% of its electricity needs from its own
renewable energy asset.

The university will offset current and projected future
annual usage through a proposed $125 million solar farm in the Southern Downs
region, which will generate about 154,000 megawatt hours of clean energy each
year – enough to power 27,000 average homes.

When the project is completed at end 2019, it will help the
university to become energy neutral by 2020.

It hasn’t all been good news for Queensland though, with
accusations in June that the state government has been concealing its financial
support for large-scale renewables projects under its Solar 150 funding
initiative, and related calls for the spending to be made public.

New South Wales

In August, Premier Gladys Berejiklian earmarked $85 million
for the development of clean energy projects and backup power systems in
regional areas of NSW with a view to reducing household power bills.

The funding included $55 million to help the private sector
develop and accelerate clean energy technology for regional communities, such
as pumped hydro.

The latest initiatives follow the government’s earlier
commitment to major investment in energy efficiency measures, including funding
for energy efficiency upgrades for families and businesses, energy efficient
bulbs in 60,000 street lights, and solar panels for homes and Government
buildings.

Tasmania

In April 2017, the island state of Australia began
investigating the potential to develop advanced wind and hydropower energy
solutions via its ‘Battery of the Nation’ initiative.

Through the initiative Tasmania aims to offer its
inhabitants energy that is clean, reliable and affordable.

A study released by Hydro Tasmania states that pumped hydro
could generate 4800MW of potential capacity across 14 sites in Tasmania.

Plans for the Battery of the Nation initiative are still in
their pre-feasibility phase and have been left out of the federal National
Energy Guarantee, despite Tasmania receiving funding from the Australian
Renewable Energy Agency for related hydro projects. The exclusion for now is
likely due to the early stage nature of the initiative.

Cost barriers

The upfront costs of solar energy are often the biggest
barriers for families wanting to take advantage and reduce their power bills.

Melbourne’s Endless Solar, listed on the NSX under code
ESCLV, has been inundated with calls since the government announced its financial
incentives.

“People always want the government to help them with these
sort of hefty investments,” national sales director Steve Wesselink told Small
Caps.

“Nobody wants to stick their hand in their pocket completely
on their own – since the government announced its latest schemes, there’s been
a lot more interest.

“Our phones in Victoria and New South Wales have been
running off the hook.”

Endless Solar is in the throes of new technology
development, working with the Australian National University to prove and commercialise
“Cool Solar” – an airconditioning system which uses solar-heated water
to produce cool air and potentially equating to 60% of a household’s energy
bill.

“Australia’s uptake of solar energy options makes a massive
contribution to the goals of the Paris Agreement,” said Mr Wesselink.

“The rising price of gas has been a big bargaining factor –
as people realise that they’re going to have trouble paying their gas bills
over the long-term, they’ve started turning to companies like ours for
alternatives to gas-supplied heating.

He said while solar can entail a reasonable upfront
investment, the payback period is quick.

“A solar hot water system has an average 15-year lifespan
compared to less than 10 years for your average air conditioning system so
while it costs more at the outset, you’re ahead in the long run and you’re
helping the environment at the same time,” he said.